Evaluation And Classification Supervison Study On Local Government Debt Risk In China

Effective prevention and control of local government debt risk is an important guarantee to ensure the stable development of economy and society.At present,although local governments speed up the issuance and use of local government bonds under the active financial policies,increasing the guidance and supervision of local government debt borrowing is still the focus of economic work.We should resolutely curb the increase of local government debt,resolve the stock of local government debt safely,and do a good job in debt risk prevention.In this context,the research on debt risk assessment and classified supervision of local governments in China is carried out to provide reference and support for the formulation of relevant policies and the implementation of measures.The paper introduced the research background,summarized the research situation of scholars at home and abroad,and described the expected effect and influence of the research work.The research content,methods and technical route are also introduced.Then based on the current situation of development,the theoretical framework of this paper is constructed.First of all,the current situation of the development and supervision of local government debt in China is sorted out,and on the basis of comparing with foreign supervision practice,the existing problems in China are summarized.Then,based on the theory of principal-agent,financial decentralization,risk management,the theoretical research framework of the article is constructed.Based on the theoretical framework design,this paper carried out the game analysis of the formation mechanism of local government debt risk,and determines the evaluation model of local government debt risk.First of all,it analyzes the manifestation of local government debt risk from the perspective of internal risk and external risk.Then,using the game theory,from the perspective of debt risk formation and supervision,this paper constructs the game model of central government supervision and local government borrowing,discusses the influencing factors and mechanism of local government debt risk formation,and proves that the game between central government and local government is the root of local government debt risk.In terms of determining the evaluation model of local government debt risk,this paper first analyzes the relationship between debt risk and local government credit from the perspective of credit,based on the relationship between government borrowing behavior and local government debt risk.Then,from the perspective of controlling the negative effects of local government debt risk,based on the analysis of the existing research results,Credit Metrics Model and KMV model are selected for key comparative analysis,and KMV model is proved to be able to assess the local government debt risk.The paper applied KMV model to assess the debt risk of local governments in China,and constructed the debt risk supervision mechanism of local governments based on the predicted risk classification.Firstly,the KMV model is optimized to make it more suitable for local government debt risk assessment.Then,based on the data of local governments' debts due and financial revenue in 31 provinces and cities in 2018,the paper makes a prediction of local government debt risk in 2018 and carries out practical verification to demonstrate the feasibility of the prediction method.Then,we forecast the debt related data of local government in 2020,predict the risk and classify the risk level.In terms of the construction of local government debt risk classification supervision mechanism,first of all,it combs out the system chart of local government debt regulatory stakeholders,analyzes the impact of regulatory stakeholders in the system chart on local government debt risk by means of questionnaire,and classifies the local government debt regulatory stakeholders according to the analysis results.Based on the prediction of risk level classification and the classification of regulatory stakeholders in 2020,the risk classification regulatory measures,the coordination mechanism of government regulatory bodies and the regulatory mechanism of financing platform are constructed,and the local government debt risk classification regulatory mechanism is formed.Through the research,the main achievements of this paper include the analysis of risk formation mechanism,risk assessment and allocation,and the construction of regulatory mechanism.First of all,this paper analyzes and demonstrates the formation mechanism of local government debt risk by using game theory.Under the mechanism of fiscal decentralization,there will always be a game between the supervision of the central government and the borrowing of local governments.The local government debt risk is a by-product of this game.Through five kinds of game hypothesis,this paper proves that the game relationship is the root of the formation of local government debt risk.Secondly,the KMV model can be used to evaluate and classify the local government debt risk.By analyzing the shortcomings of the previous research on local government debt risk assessment,this paper focuses on comparing CM model and KMV model,and proves that KMV model is more suitable for local government debt risk assessment.Expand the scope of assessment from local government bonds to debt with repayment responsibility,optimize KMV model from the aspects of financial revenue,asset value fluctuation,default,etc.,assess the risk of 31 provinces and cities in 2018 and compare with the actual situation,to demonstrate the feasibility of KMV model.After that,we predict the data and risk of local government debt in 2020.Finally,the paper constructs the coordination and supervision mechanism of local government debt risk in combing the system of local government regulatory stakeholders.By using the questionnaire and Delphi method,this paper combs out the relevant system of local government debt supervision,proposes different types of local government debt risk prevention and control measures based on the estimated local government debt risk classification,and constructs the risk prevention and control coordination mechanism based on the local government and the risk supervision mechanism based on the local government financing platform.